BTC privatisation talks stall again?

22 Sep 2008

Bahamian Minister of State for Finance Zhivargo Laing has told local press that the privatisation of the Bahamas Telephone Company (BTC) is moving ahead, despite the prospective purchasers having commissioned a new report from their financial advisors. ‘I don’t think they (BTC) have had any additional talks with Bluewater,’ Minister Laing told the Jones Journal. ‘I think that they have been awaiting a report from their advisors, KPMG, and that report will really determine where they go from there.’

According to TeleGeography’s GlobalComms database the privatisation of BTC has been ongoing since early 2003, when the government announced that it would sell a 49% stake to a ‘strategic partner’. Three parties expressed interest in the sale – TransWorld Telecom, BahamaTel and Bluewater Ventures – but by May all but the last, a private equity firm backed by John Gregg, a former top executive of British cableco NTL, had pulled out. With just one interested party in the frame the government engaged in some prolonged heavy bargaining, but no deal was forged, leaving the government with no option but to put the entire process on hold. The issue was not dropped altogether however, and in November 2005 Prime Minister Christie was reported as saying he remained 100% committed to the telco’s privatisation, though he stopped short of giving any intended dates. In January 2006 the Minister of State for Finance, James Smith, was quoted as saying that government officials were ‘in discussions’ with an interested party. Although nothing official was made public, it was rumoured that the Christie government had given the nod to a BHD260 million (USD260 million) deal with Bluewater for the 49% stake, of which BHD220 million would be paid up front, BHD35 million would be paid in five years time, with a final BHD5 million due a year later. However, it soon became clear that Bluewater was only prepared to pay BHD260 million if BTC was guaranteed an extension of its wireless monopoly for a period of between five and seven years (with MVNOs permitted to enter the market after three years), and it was given a commitment that the company would be permitted to offer pay-TV services once Cable Bahamas’ exclusivity ends in 2009.

Not surprisingly, the issue of extending BTC’s monopoly proved extremely contentious, and once again became subject to political debate. In May 2007 Hubert Ingraham’s opposition Free National Movement (FNM) party won parliamentary elections, ousting the Christie government. Ingraham later said he had no intention of ‘offering credit’ for the purchase of BTC (referring to the BHD35 million Bluewater promised after five years), casting doubt on the proposed deal.

Bahamas, Bahamas Telecommunications Company (BTC),

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